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Archive for February, 2013

PRECIOUS METAL DEFIES “LAW OF DEMAND”

BUYING GOLD/SILVER, GOLD AND MONEY   No comments yet

 

Few indicators validate physical silver and gold like today’s topic. Not that I need more convincing but a little reassurance never hurts, especially in today’s world.  Gold and silver are defying the economic law of supply and demand. This isn’t really a law but guys with bad bow ties like the legalistic sound of economic “law of demand”, so be it. Nevertheless, this anomaly, or oddity, is well worth space on TPS (The Prospector Site) and proves silver/gold are cheap compared to days ahead. With that said, I’m so very glad you’re sharing your precious time with us….thanks.

Below is an interesting chart provided by Zero Hedge (click link to view full article). As of February 2013, demand for gold has soared all while declining in price.

As you can see below the same odd correlation is taking place with silver, too.

 

TPS readers already know that I pay little attention to short-term silver and gold fluctuation. I only mention it today for those sitting on the PM fence looking for a soft entry or add more metal to a growing stack. The charts above clearly speak for themselves, at least for those living within a realistic mind.

It’s fair to compare early 2013 PM demand to guns and ammo. The same level of demand that leaves gun shelves empty also increases the price of firearms and ammo. But guns and ammo have one huge advantage over silver or gold. Gun makers can hire more hands, lease more space and eventually increase output. The same goes for ammunition as well.

Physical silver or gold are different. No one wants to see increased metal output more than PM brokers or dealers. My conversations with folks in the PM field lead me to believe that most making a nice living selling metal act unworried…. but I have my doubts. Precious metal rationing and interruption should be expected; charts like the two above only validate my opinion.

Does this alone justify dropping everything life related to buy silver or gold? No, not by a long shot. Trading dollars for PM must be part of an overall life-changing decision of self reliance. The decision to buy PM must include how much, from whom, and where to store. The decision to buy is only the first step, regardless the price of today’s silver or gold.

QUESTION:  I own my home, cars, and owe no one a penny. A friend turned me on to your site and I have to say your precious metal information is intriguing – but still not convinced buying gold is as beneficial as some believe. Please explain how a holding of gold will help after an economic collapse.

TPS Reply: Thanks for the great question, and reading TPS. Your question is one more and more ask as the word “recovery” sounds less promising with each passing day. The truth is we are not in recovery, we are in economic denial. This denial is what separates so many from the protective nature of silver and gold. Take trillions of borrowed dollars from the equation and watch how fast economic volatility becomes the norm.

First, economic collapse is a misleading term. The collapse you speak of affects those unprepared far more than those living within means and holding wealth stored in safe havens (see video below). Don’t take this as uncaring but a “collapse” will only strengthen the wealth of most holding silver and gold. Honestly, I would enjoy nothing more than watching gold decline to $500 an ounce (this means our economy is recovering, truly recovering), but this will not happen anytime soon.

The word I use is correction. I feel the ill effects of a declining economy will only become obvious to most when it affects them personally. Think back to September/October 2008 as the DOW declined from 14,000 to just over 6000. Those today celebrating the recent DOW high have short memories, you agree? Think back to the housing correction just prior to the DOW correction, too.

People pay attention when wealth disappears and hungry.  Then, and only then, will PMs reveal themselves as a true safe haven in an age of great economic uncertainty.

It sounds like you’ve worked hard for what you own. I can tell by your comment that a life of prudence and independence is something you value. Assets like cars, houses, retirement plans, etc could rapidly decline in value as the masses liquidate traditional assets, and toys, to pay for life’s necessities. Wealth stored in silver or gold traditionally benefit in such times of monetary correction.

This is why it’s so important to incorporate PM into an overall plan of self reliance. Not the end of the world but certainly a reshuffle of worldwide wealth. Why not invest in the one asset capable of transporting personal wealth beyond this time of correction? Thanks again for the comment.

WORTH NOTING: Folks, we must keep eye on the overall economic picture here. Rising home values and a rising DOW have nothing to do with recovery. Remember, both significantly corrected soon after Mr. Bernanke and our Congress pronounced both markets safe & sound (2007/08). This illusion of recovery is nothing more than an economy supported by nonstop currency creation and unsustainable over long term. The dollar number next to physical metal is irrelevant. My advice is to step up your plan of protection, soon.

 

 

 

DC Carlton is the founder of The Prospector Site and author of Why Silver and Gold Will Go Higher. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources.

 

 

 

 

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GOLD DISORDER?

BUYING GOLD/SILVER, GOLD & SILVER, GOLD AND MONEY, SELLING GOLD/SILVER   No comments yet

By now I’m hoping my readers understand gold and silver’s relevancy according to the age we live. The benefit of such understanding extends beyond the typical layman’s confusion during PM (precious metal) decline, like lately. I pay little attention to the dollar number next to gold or silver. It means nothing when it rises and means less when it declines. I view both metals as necessary according to our real-time economic climate and will only change my opinion of PM relevance when fiscal sanity improves. Until then words like disorder, disturbance, disarrangement and decline mean nothing as others use these descriptions to label PM volatility. I pray you feel as I do.

Even more ironic – while the world views hard assets as risky a growing minority are feverishly adding new stacks of both silver and gold simultaneously.  Metal buyers realize the dollar lid is no longer in jeopardy of blowing off, it’s blowing off. This is why over 7 million ounces of Silver Eagles found new homes in January 2013 alone. The time to buy physical silver or gold is upon us.

Political leaders are on the offensive. This means they will say anything to keep law abiding individuals from pouring into the streets under protest over record deficits with no plan to scale back the size and power of government.

Their offense (government) creates a defensive nature in most Americans. Look how quickly this administration rolled from PPACA (Obama Care) to gun control to immigration reform to who knows what’s next. Folks, it’s only February and the arrows out of Washington have every taxpayer, every business person thinking of nothing but self preservation.

This offensive role is no accident. You can’t ignite revolt, monetarily or otherwise, while circling the wagons. The gold disorder of today is part of such assault.  Keep PM volatile and less differentiate real money from promissory notes, aka dollars. There is no gold disorder, there is only fiat disorder. You must know and accept the difference in order to trust the same protective instincts that drove you to PMs in the first place!!!

We often hear economic experts try to explain wealth distribution. This means nothing more than the rich getting richer and the middleclass & poor growing poorer. I don’t see it this way, at least not exactly. I see it more like a power shift built around vulnerability, wealth distribution is only a byproduct of a society less interested in real socio-political & monetary issues and more enthralled with modern entertainment & entitlement.

We only accept the proposal of something unconstitutional – like gun control – because we feel vulnerable, or unsafe. We only accept governmental overreach because we feel vulnerable to economic correction. We only allow massive currency printing and dollar debasement because we desperately desire normalcy in exchange for vulnerability.

This feeling of vulnerability eludes those that control their own wealth. The governmental infringements aforementioned are inconvenient, yes, but nothing close to a level of dictating. I see little disorder among those prudent enough to store wealth within physical silver and gold AND living a life of self reliance. Again, the dollar sign attached to today’s gold and silver has nothing to do with it.

QUESTION:  What is happening to physical gold and silver? Why is it not going higher?

TPS Reply:  Thanks for the short question. Not only is gold not going higher but it’s down around 5% year-to-date. Your question is worth asking but unfortunately no one can honestly offer an answer. Gold has appreciated, on average, around 17% per year over the last decade; I expect this trend to continue over long term.

Most gold experts will answer a question like yours by trying to explain PM suppression. I rarely mention metal suppression because to me it’s wasted energy and discussion. We can’t control naked shorting, nor can we control Wall Street’s finest who are more interested in their own interest over trading with integrity. I refuse to be a part of such monetary recklessness.

No one thinking realistically will question gold’s relativity in such an age as we’re living today. The fact gold is suppressed is the good news since this offers readers like you an extended opportunity to add more silver and gold to your growing stack. I recommend we stay the course, regardless how gold performs in the short term. Thanks for the question.

QUESTION:  Love the Prospector Site and really enjoyed your book.  I have a question relating to reportable PMs at time of sale. Can you explain why some silver and gold sales are reported to the IRS and some aren’t (when sold). Is it that important to buy PM excluded from notification at time of sale? Thanks again for what you do.

TPS Reply: Thanks for the kind words. You are correct; some PM transactions will trigger IRS 1099-B. As of right now some won’t, the determining factor lies within how, what, and to whom you sell. Selling metal back to a PM dealer will trigger an IRS notification IF THE PM SOLD FALLS WITHIN REPORTABLE SILVER & GOLD.

Is it that important to buy PMs excluded from such income notification? Probably….. here is why. I have little doubt that a government so large and in debt will eventually demand notification of most reportable income. Silver and gold held in American Eagles, by example, are excluded and do not require an IRS notification after sale, at least for now. This means declaring such income is voluntary (of course you could face stiff penalties if hiding income).

The difference between amount paid and amount sold is income. This income…to my understanding falls under capital gain and is subject to taxation. This taxation INCLUDES all gold and silver sales, nothing excluded. Now back to your question, some forms of bullion, bars and rounds will not trigger an IRS notification. This doesn’t exclude the metal holder from a tax obligation but will exclude a seller from receiving IRS 1099-B form.

I’m not here to preach tax obligations or obstruction. Each person holding PM is accountable as they choose. I provide the facts as I see them and the choice, as always, is yours. Feel free to set up a personal consultation since buying the right silver and gold is something we’ll completely cover. Thanks for the questions.

COMMENT:  I was stunned to find this site.  These are my sentiments exactly.  It has taken me awhile to get myself together and begin the process of purchasing pm.  I would more than welcome info on where to purchase safely.

TPS Reply:  Fantastic, another one joins the growing minority of PM holders….good for you. The process of safely buying silver and gold need not be complex. The “right” PM is all metal offered as close to spot price as possible. Finding the right source is crucial in order to have the peace of mind that only comes from PM authenticity.  You can’t go wrong with new bullion American Eagles, gold or silver.

I recommend contacting Colorado Gold or Miles Franklin if searching for a reliable PM source.  Congrats for making the most influential monetary decision of your life.

 Worth Watching:

The video below features Paul Harvey. For those unfamiliar, Paul Harvey was a radio broadcaster very concerned with the economic and social decay of America. We lost Mr. Harvey in 2009 but his words ring loud as ever thanks to modern-day technology. Please take a few minutes to watch, or re watch, If I Were the Devil by none other than Mr. Paul Harvey. Oh, did I mention the message below was recorded over 47 years ago, amazing.

 

 

DC Carlton is the founder of The Prospector Site and author of Why Silver and Gold Will Go Higher. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources.

 

 

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THE BUSINESS OF GOLD

BUYING GOLD/SILVER, GOLD & SILVER, GOLD AND MONEY, SELLING GOLD/SILVER   1 comment

Have you wondered how a person can profit from gold/silver beyond ownership? Our world is changing at a pace most cannot envision. This change is disruptive for most folks who have now grown accustom to normalcy. Like it or not economic imbalance is the new normal. But today I’m here to say that a new normal offers opportunity for those willing to embrace change and then feed the growing industry soon described. This potential comes thanks to the blooming business of gold.

It is no secret we are living in a global age. Technology has forever changed the way goods and information connects obscurity with opportunity. But even in such a global age something radical is about to change within your local economy. This change is compliments of a society unaware of how quickly incomes will diminish or fall under capital control. Let’s look at diminishing income first.

A sobering chart hangs in my office titled Production Worker’s Hourly Wages in Gold. It begins with my birth year (1965) showing the average American hourly wage earner making around 2.3 gold grams per hour. The chart ends in 2012 with the same wage earner making around .40 gold grams (over 5 times less). This vital tale of earning decline eludes those who do not understand gold and silver. Most view a better wage gauged in dollars, not grams of gold. They don’t factor the shrinking value of currency.

Now let’s address capital control. Capital control is a term you should expect to hear more of in the near future. Capital control is just another way a government controls the wealth and positioning of her people. It should be obvious that governments around the world are growing and have no intention of changing course. Growth takes revenue. This revenue comes from printing more currency or redirecting the wealth of the taxpayer, saver, investor, and eventually, the impoverished.

As more folks rely on government for a paycheck…. and their very existence, this offers more opportunity for price controls. This is something I’ve realized for many years and why I refuse to compromise my wealth to such tyranny.  The more people dependent on government the easier it becomes to justify the need for price control measures. After all, it is unpatriotic to not pay “your fair share“. Rarely are patriotism, impoverishment, and currency debasement mentioned in the same sentence.

The bad news is you cannot fight the trend just described…..not toe to toe at least. But you can alienate your wealth and future into a position that benefits from such a disturbing trend. Starting a small business is the next economic safe haven for those who refuse to pay one dime more (in taxes) than necessary. Patriotism has nothing to do with it. We will discuss many more small business opportunities here on TPS in the future.

Today’s opportunity is all about gold. Not just owning gold, or silver, but building a business around gold. Everyone reading today already views gold as real money. This will only become more obvious as currencies around the world grow increasing worthless. This will lead everyday folks searching for real assets. The intent, or trend, is finding something of value and turning it into cash….. not realizing too much cash is the problem. It will take time to bypass the misconception of dollars as money but this monetary fact will reveal itself.

This misconception is an opportunity to grow wealth and increase cash flow. The opportunity described today is not a cash for gold type business. It is a gold for dollars business; let me explain. Most Americans are sitting on more silver and gold than they realize. They will eventually realize the potential of this wealth and look for ways to turn jewelry and old coins into a currency. This currency will pay the electric bill, buy a gallon of milk, and so on.

Entrepreneurs will capitalize on such a demand and need. How, by offering their local economy a source to leverage silver and gold for dollars? Typically, today’s cash for gold industry buy scrap PM (precious metal) for a discount. Once the exchange is complete the metal is gone forever leaving the seller with nothing more than a temporary fix for a long-term problem.

The trend; or business opportunity I’m describing today goes beyond a typical cash for gold scenario. The new trend will resemble something similar to a small banking institution. As the value of gold and silver becomes more obvious, fewer are willing to participate in discount selling. This will lead to leveraging unlike anything we’ve seen before, at least with PM. Picture a modern-day “quick cash” business that holds scrap, jewelery, bullion or rounds in exchange for a short-term loan. The lender holds the metal and the PM is the collateral.

Let’s take a look at the benefits for both the lender (new business) and borrower. The lender, or person that accepts PM in exchange for a short-term loan, is repaid plus paid above market interest each month. If the borrower fails to repay the loan then the small business keeps the PM. The borrower benefits by temporarily leveraging a valuable asset, silver and gold, for liquidity (cash) all without forfeiting PM ownership.  Picture a modern-day pawn business that services the low, middle, and upper income classes.

I expect this new business opportunity to simulate a pawn shop but without the racks of power drills and golf clubs. This venture could be a stand alone business or fit nicely into an existing brick-n-mortar establishment. Today’s technology will simplify the accounting side by taking advantage of today’s online pay systems. If you’re in the market to profit beyond PM buy and hold, I strongly encourage a closer look at the new business of gold.

 LOOKING FOR GOLD?

Are you a prospector? If so, I’ve been contacted by a television production company interested in casting real prospectors for a new TV show. They are currently working through the show’s casting process so send me over an email if you’re interested and I’ll forward it to the decision makers.

It sounds like the new show will require international travel so keep this in mind. Their client list includes shows on Discovery, History, National Geographic, CMT, TLC, Lifetime, and others. The Prospector Site is not connected with this new program, only passing along this opportunity to my readers.

 

DC Carlton is the founder of The Prospector Site and author of Why Silver and Gold Will Go Higher. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources

 

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WHY IT’S HARD TO JUSTIFY PRECIOUS METAL

BUYING GOLD/SILVER, GOLD & SILVER, GOLD AND MONEY, GOLD OR SILVER BUBBLE, SECURING GOLD & SILVER, SELLING GOLD/SILVER   No comments yet

It’s hard to explain the value of physical silver and gold to someone clueless. I often hear people ask, “Why is it so important to buy PM (precious metal)” or “why do you buy silver?” The very fact a person asks such a question tells me they’re not ready for PM, not personally at least. This is okay. Each person first has to come to terms that our economic recovery is an illusion before giving an ounce of thought to gold. I find myself comparing it to a gravely ill loved one who is imminently facing death. Like a life ending, the transition of currency back to sound money (hard assets) is a natural occurrence often repeated throughout history.

It usually takes on hour with a client – by phone -to match the right metal, where to buy it, and how to store it. This assumes the person is really interested in buying PMs in the first place. Some folks aren’t ready for the party to end. They’re still holding out for “normal” to return and, honestly, suffering from a self-centered perspective.

Buying silver or gold is a timing thing. My decision to own PM developed along with an overall life plan for independence. Growing wealth by way of PMs is a byproduct of self reliance. Sure I like the fact my savings grows each year but I like being a spectator during times of economic calamity most. I’m not sure what others think when I compare PM to monetary insulation.

Some have emailed asking how to convince a spouse or adviser of PM’s relevancy in this age we live.  I’ve even had some clients ask me to speak with a spouse which, by the way, is rarely enjoyable for either party. It’s not uncommon for one spouse to eventually buy silver or gold behind the other one’s back. I don’t recommend this in most situations.

I personally don’t believe in convincing people to own PMs. I’ve seen this turn into a blame fest the first time gold dips or silver turns volatile. It is much more productive to establish signals of relevance; below are but a few examples.

1.  Keep track of food costs; even to the point of writing costs down (rising costs are signs of inflation).

2.  Watch how often Washington solves fiscal problems by borrowing and taxation, never cutting.

3.  Begin to track values not in dollars but gold grams.

4.  Pay close attention to your local economy (a local economy is far more relevant than a national or global one).

5.  Make yourself aware how often elected leaders blame others or an event for a bad job’s report, growth, etc.

6.  Be aware how often the media distracts viewers in regard to “real” economic events.

7. Make note the ways the US simulates the failing path of Greece and Spain.

8. Research and track where the money comes from (who backstops the mortgage industry?).

Well over 90% of those sitting on PM sidelines are waiting for metal prices to rise. They gauge silver and gold’s relevance on rising metal values. The last couple of bubble decades have ruined too many small investors. They fail to ask themselves “why” an asset rises. This is why so many lost a fortune in the last housing bust. This is why others will lose a fortune in the next housing bust. We used to be “buy low” investors and good money stewards. Now, we’re “buy based on demand and a rising price” investors.

I began my gold voyage when it sold in the high 300s. I viewed gold’s protectiveness first and potential wealth gain secondly. The fact so few have the same view only proves far too many folks today underestimate the gravity of today’s economic situation. They are, in all actuality, still looking for the quick buck and care less about protecting their assets.

Dare to guess the number one reason folks aren’t buying precious metal? It is because precious metal hasn’t experienced a big price jump in the last year or so. This inaction leads to complacency. The one thing this writer can just about guarantee is this next point.  We will reach a time, in the near future, when everyone with a dime to spare will long to own PMs….. without convincing.

 Question: Thanks for TPS. I’m struggling with a safe way to protect my PMs from confiscation and theft. I’ll get to my point quickly since I’m sure you receive many emails. If I decide to store some of my gold internationally will these depositories notify the IRS when I sell? Any ideas how to discretely buy and sell?

TPS Reply: Thank you for reading TPS, and asking such great questions. As you know, today’s administration is adamant with everyone paying their fair share. This means your PM profit has a big bull’s eye on it. I would expect to receive a 1099 when you decide to sell, and this includes all assets…..not just PM. I recommend keeping record of price paid, price sold of all reportable gold.  To answer your question I would expect a 1099 form regardless where the metal is located.

Here is my plan, for what’s worth. I’m a long-term PM owner. I believe I can outlast our overreaching government. This means I have no plans to sell my gold anytime soon. Things change quickly and my plan may have to adapt along with this change. At some point precious metal values could get ahead of themselves (bubble).

I believe silver and gold will eventually back a new or existing currency. How can this not be good for those of us holding physical PM? If my choices are to chance paying high PM taxes or losing my wealth in dollars, I’ll pick gold seven days a week. The “Golden Rule” always works in favor of those holding real money.

Now, your last question about discretion is good. We still have choices as of February 2013. This means you can legally buy physical silver and gold with no records attached. I strongly advise each person reading to consider exercising this freedom. Thanks for the questions and send new ones over anytime.

 

DC Carlton is the founder of The Prospector Site and author of Why Silver and Gold Will Go Higher. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources

 

 

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